Q & A with Christopher Johnston from Merbanco

I sent some questions to Merbanco CEO, Christopher Johnston earlier today and he’s just provided me with a few answers. Given the time pressures he’s under at the moment, I really appreciate his efforts to provide us with a glimpse into his thoughts about the current situation and the potential for the future. ——Swade: Saab comes with a faithful following but it also has some baggage in motoring industry terms. What do you think are the strengths with the Saab brand? Christopher Johnston: Saab is a special brand even in these tough times. It is suffering from low sales resulting in large part from uncertainty. There are several strengths: The people, the history, the culture, the location, the dealers, and the loyal following from customers. Saab has several exciting new products that are ready to go.SW: Saab are one of two car companies in Sweden. How do you see the automotive sector there and Saab’s place in it? CJ: The auto sector is stressed in Sweden just like everyplace else. I don’t agree with some that Saab should be considered mere overcapacity. Saab will always be strong and important in Sweden and will be a strong niche or pocket brand in other countries. I would hate to see both Volvo and Saab potentially moved out of Sweden.SW: Prime Minister Reinfeldt has cited the over-capacity of the global car industry as one of the reasons that Saab should effectively be left to sink or swim. What do you think about that? Why do you think Saab has a place in the modern automotive landscape?

CJ: These are unprecedented times, not seen since the Great Depression. Most countries have stepped in and supported their vital industries, including automobiles. People are frightened. Saab is both an industrial “asset” in Sweden and strong brand worldwide. Of course there is a place for Saab. If I were Sweden, I would be doing all I could to protect my prized assets – if you lose them – the jobs don’t come back. Think about it, how much has Saab contributed to Sweden over the years? How much can Saab contribute in the future? How many families have worked there? Multi generations? The brand is fine, the economy is the major challenge. History will not treat well the person who decides to close or not help something so special. If Sweden can’t help, I would understand. If they can help but choose not to, well, that isn’t the way we think.SW: Should the buyer receive some assistance from the Swedish government if successful in acquiring Saab? You’re an experienced businessman in a country that prides itself on its free market structure. What sort of support do you think the Swedish government – also from the right of the political spectrum – should rightfully provide? CJ: The Swedish Government should indeed support Saab no matter who buys it or if GM should choose to retain it. There should be a mix of Grants and Loans to “prime the pump”. The alternative sounds like widespread unemployment which will deeply affect Sweden and it’s people. With support, there is no question Saab will recover. Remember, these are far from normal times.SW: There’s equal parts praise and criticism that could be levelled at General Motors in their stewardship of Saab. Whilst they did keep the brand alive until now, they never realised much of its potential. Now that GM themselves have been given a life by the US government, do you think they perhaps owe Saab a similar chance if the cost of sustaining them until a deal is done is not prohibitive?CJ: I believe Saab should have every reasonable chance to find a new buyer and succeed. I believe GM would like that as well. Saab can still be sold. All the parties have to put their best foot forward in the same direction. As long as it is reasonable, failure should not be an option. The impacts are just too high.SW: You were reported as being involved with Saab early in the sale process and got to know some of the people there reasonably well. What do you think of the job they’ve done in steering the company thus far? CJ: All the people at Saab have done a great job under very difficult conditions. I can’t imaging how stressful this all is. GM has done a good job as well trying to find a buyer and making a workable deal. If the parties will come together, Saab has every good chance to succeed.SW: That management team has put together a business plan that’s been well received by the Swedish government and the European Investment Bank. If you’re successful in this venture, do you intend to follow that business plan? Expand it? Hypothetically, if I were the owner of Saab, we would adopt the plan and adjust from there. It’s no secret I am very customer centered.SW: Let’s pretend for a moment that you’ve got a child who’ll be of driving age in 2014. Which model are you going to buy for them (or encourage them to buy with their own hard-earned)? CJ: That’s easy. The 2012 re-made 900 Aero cab xwd, twin turbo. On the other hand, their mom will vote for something a bit more practical. XWD is a must. 9-4x? —— Again, my thanks to Christopher Johnston for taking the time to address some of the questions sent and our best wishes for a good week and a successful outcome.